Effect of Uncertainty in ZLB condition with many shocks


I am trying to study the effect of uncertainty in zero lower bound in a different fashion than Basu and Bundick (2017). Including uncertainty, I will have 4 shocks in the model economy. I am trying the algorithm by Tom Holden but I am getting an error. I don’t know whether the algorithm can handle more than one shock in ZLB. May anybody explain to me about studying the effect of uncertainty in ZLB condition with many shocks.


@cfp Hi Tom, this sounds like a question for you.

For “DynareOBC” support, you are best off either emailing me (Tom) directly, or submitting an issue on the DynareOBC GitHub page. In either case, you should carefully document what you’re doing, providing the simplest possible MOD file that generates your error, along with the command you used to invoke DynareOBC, and details of the solver you installed. Note that I strongly recommend a commercial solver is installed (e.g. Gurobi) as documented in the extensive ReadMe.

In answer to your particular question: yes DynareOBC can support arbitrarily many shocks (and arbitrarily many bounded variables).